Preliminary Due Diligence

1. Design & Architectural Review

• FAR

• Building Height and Set-backs

• Parking Requirement

• Open Space

• Floor Height limitations

• Environmental Impact and Compatibility

• Architectural Design’s Efficiency of Development

• Architectural Design’s Efficiency of Operations

• Traffic Impact study (if needed)

2. Cost Estimates (Conceptual Costing) 

• Construction costs

(i) General Contractor

(ii) Major Sub Contractors

(iii) Breakdown of Labor, Material and Equipment

• Payment & Performance Bond

• Builder’s Risk Insurance

• Adjustment of labor cost for State Prevailing Wages (if any)

• Consultants (Civil, structural, and MEP)

• Public Angency Fees

• Property Taxes

• Liability Insurance

• Construction Management

• Leasing Brokers Fee

• Allowance for tenant Improvements

• Overhead, Fees & Expenses

3. Market Research

• Rents (current & trajectory)

• Vacancy Rate (current & trajectory)

• Time to Lease, and Time to Stabilized Operations

• Assessing Disposition Price, Costs and Time

(i) Supply and Demand for Property Type

(ii) Projected Replacement Value

(iii) Relative Values for Alternative Asset Class (Real State Hedge Funds and Commodities)

(iv) Projected Yields (Discount Rate)

(v) Prospect of REITs Interest (as prospective buyers)

(vi) Market Liquidity for Property Type

(vii) Market Volatility for Investment in Comparable Risk Assets

4. Capital Structure

• Core Equity (NPI 5% – 10% of Equity)

• Co-Investors (Institutional capital 90% -95% of Equity)

(i) Domestic US-Investors

(ii) Investors of Non-US Domiciles

• Potential Partnerships

(i) Property Seller

(ii) Joint Venture Partners

(iii) Value-add Partners

(iv) Public Agencies

• Debt (65%)

(i) Private debt

(ii) Mezzanine debt

(iii) Subordinated debt

(iv) Public Sector Funding

• Interest rate and other Loan Terms & Conditions

• Debt Repayment Guarantee

• Selling Brokers Commission

• Contingent Deferred Sales charges

• Return on Investment (IRR)

• Percentage Performance Fee

• Lease Review and Negotiation

• Tenant Improvement Build out Compliance and Move-in

5. Leasing

• Lease Review and Negotiation

• Tenant Improvement Build out Compliance and Move in.

6. Cash Flow Projections

• Stabilized Cash Flow (short term) Projections

• Long Term Normalized Cash Flow Projections

7. Foreign Domiciled Co-Investors

• Determination of Credit and Currency Risks

• Carry-Trade Opportunity / Deterrence

• Foreign Exchange Position Options

(i) To Hedge

(ii) To Benefit from Additional Profits

(iii) Forex Derivative Product-options

8. Risks & Mitigating Factors

• Market Risk

• Interest Rate Risk

• Credit Risk

• Real Estate Risk

• Foreign (non-US) Risk

• Currencies Risk

• Replacement Risk

• Derivatives Risk

• Leverage Risk

• Disposition Strategy and risk

9. Property Management

• Lease Administration

• Accounting Services

• Maintenance and Operations

• Capital Improvement Management

• Property Tax Appeals

• Service Contract Administration

• Tenant Retention Programs

• Building Efficiency and Expense Control Analysis

• Asset preservation and value Maximization through Long Range Strategic Planning.

The materials and information in this memorandum (“Presentation”) is being made on a confidential basis to certain prospective lenders and investors who are qualified to invest in (as limited partners) and/or lend to entities to be formed with respect to each project (the “Ventures”) where NPI or Affiliates will be the Managing Member of the Ventures and the sole sponsor of the projects.  This Presentation does not constitute an offer to sell or a solicitation of an offer to purchase interest in the Ventures. Any such offer or solicitation will only be made in connection with the delivery and execution of the Ventures Operating Agreements, which should be read carefully prior to any investment in the Ventures for a description of all of the terms of such investment(s).

Managers personnel and facilities of NPIC and its affiliates will be made to Ventures through contractual arrangements.  Accordingly, the prior performance of NPI, its principals and managers may be a key relevant factor in any consideration to participate in the Ventures; but prospective investors should bear in mind that the past record performance is not necessarily indicative of future results and there can be no assurance that the Ventures will achieve comparable results in the future.

Nothing contained in this Presentation shall be deemed to be forecast projection or estimate of the Ventures future operations or financial performance. This presentation may contain statements, statistics and projections that include words such as “intends”, “expects”, “anticipates”, “estimates”, “targets” and words of similar import. By their nature, such statements involves risk and uncertainties because they relate to events and depend on circumstances that will occur in the future.

No assurance can be given that such expectations will prove to be correct, and actual results may differ materially from those projected because such statements are based on assumptions as to future economic performance and are not statements of fact(s). There is no obligation to update these forecasts, projections or estimates to reflect events or circumstances after the issuance date of this Presentation nor is there any assurance that the policies, strategies or approaches discussed herein will not change.

Certain information in this presentation was provided by third parties. While NPIC  believes that the sources of such information are reliable, no representation or warranty as to accuracy or completeness of such third party information is made by virtue of its inclusion in this Presentation. The prior performance data are approximates internally prepared and in large part have not been audited.  This Presentation is not intended to constitute investment legal or tax advice. This presentation is confidential and no part hereof may be copied, duplicated or redistributed.